⚡ THE ESSENTIALS IN 20 SECONDS
- FBA (Fulfillment by Amazon): you send inventory to Amazon’s fulfillment centers and Amazon stores, packs, ships and handles returns.
- FBM (Fulfillment by Merchant): you store and ship every order.
- FBA usually brings Prime eligibility and helps you compete for the Buy Box, but charges fulfillment and storage fees.
- You do not have to pick one for everything: you can decide product by product.
IN THIS ARTICLE
Choosing between FBA and FBM changes your costs, your customer experience and even your ads. It is not a one-time decision: it is a per-product decision worth reviewing every season.
FBA and FBM: FBA is the service in which Amazon stores and ships a seller’s orders in exchange for fees. FBM is the model in which the seller stores and ships on their own, using their own logistics or a third party’s.
The difference in one table
| FBA | FBM | |
|---|---|---|
| Who stores | Amazon | You or your 3PL |
| Who ships | Amazon | You or your 3PL |
| Customer service and returns | Amazon (largely) | You |
| Prime eligibility | Yes, usually | Only through specific programs |
| Costs | Fulfillment and storage fees | Your warehouse, carriers and staff |
| Control | Lower | Higher |
| Scalability | High | Depends on your operation |
Advantages of FBA
- Prime badge and fast shipping, which usually improve conversion.
- Helps you compete for the Buy Box.
- Amazon handles much of customer service and returns.
- Scales without you having to grow your warehouse.
Advantages of FBM
- Full control over packaging, timing and experience.
- No Amazon storage fees or charges for slow-moving inventory.
- Better for large, heavy, fragile or slow-selling products.
- Useful as a backup when FBA runs out of stock.
Costs: what to compare
Compare the total cost per delivered unit, not just the fee. In FBA, include fulfillment fees, storage, aged inventory surcharges and inbound shipping. In FBM, include warehouse, packaging, carriers, staff and returns. Amazon’s fees change by country, size and season; always check the current official fee table.
How it affects your advertising
If an FBA product runs out of stock, your ads stop serving or lose efficiency. If it is FBM with long delivery times, conversion may drop and ACOS rises. That is why logistics and ads must be planned together: before raising budget for a peak event, confirm how many weeks of inventory you have, and set rules to lower spend automatically when stock gets low.
How to decide by product
- Is the product small, light and fast-moving? Usually FBA.
- Is it large, heavy or fragile? Consider FBM or a 3PL.
- Does it sell slowly? Watch out for FBA storage fees.
- Is the category highly competitive on Prime? FBA is almost mandatory.
- Do you have seasonal peaks? Consider FBA plus FBM as a backup.
A typical case (fictional)
A home goods brand had everything on FBA, including bulky, slow-moving products. Storage fees were eating its margin. It moved those products to FBM with a 3PL and kept small, fast-moving products on FBA. Its contribution margin improved without losing sales on its main products.
The right logistics is decided product by product, not for the whole catalog.
Common mistakes
- Sending too much inventory to FBA before knowing sell-through.
- Ignoring aged inventory surcharges.
- Using FBM with long delivery times in categories where everyone is Prime.
- Having no backup plan when FBA runs out of stock.
Checklist
- Total cost per delivered unit for each model.
- Sell-through for each product.
- Size and weight reviewed.
- Inventory plan for peak seasons.
- FBM backup for key products.
- A quarterly review of the decision.
- Ad rules linked to inventory levels.
FBA and FBM beyond the US
In other Amazon marketplaces, such as Mexico, the logic is the same: Fulfillment by Amazon gives access to Prime and fast shipping, while self-fulfillment gives you control. If you also sell on Mercado Libre, compare with its logistics models to decide where each inventory pool should sit. And if you work with a 3PL, ask for real delivery times by region before choosing FBM in competitive categories.
Agency secrets about FBA and FBM
What I recommend to brands:
Before raising budget in peak season, confirm how many weeks of FBA inventory you have.
Keeping FBM active on key products avoids lost sales when FBA runs short.
A low fee with lots of stagnant inventory can end up costing more than FBM.
The best logistics is the one that keeps your product available, fast and profitable. Everything else is secondary.
I’m Alonso Jiménez, a Retail Media account director. I manage campaigns on Amazon, Walmart, Target, Instacart and Mercado Libre every day, for brands in the US, Mexico and Latin America.
Frequently asked questions
What is FBA on Amazon?
Fulfillment by Amazon: Amazon stores, packs and ships your orders in exchange for fees.
What is FBM?
Fulfillment by Merchant: you store and ship your orders.
Does FBA help win the Buy Box?
It usually helps because it offers fast shipping and Prime, though price and other factors also count.
Can I use FBA and FBM at the same time?
Yes, you can decide by product and use FBM as a backup.